Trial Lawyer Resource Center

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In a perfect world, personal injury lawyers could just get the best possible recovery for their clients, either by settlement or trial, and that would be the end of it. Often, it is just the beginning of a case because of medical liens. In terms of hierarchy of difficulty, Medicare liens are among the most difficult. This post offers a few thoughts on dealing with Medicare liens.

Medicare was established in 1965 as a part of the Social Security Act. In theory and usually in practice, Medicare offers what should be a part of any civilized society: health insurance and medical care for the aged and disabled. When a personal injury plaintiff receives Medicare benefits, Medicare has a subrogation interest to any award given in a workers' compensation, medical malpractice or auto accident claim (both first and third party recoveries). While Medicare has been provided a direct right of action, they usually choose to piggyback off personal injury lawyers seeking compensation for their clients.

A Medicare lien has real teeth, taking priority over all other liens or interests on any settlement or judgment proceeds. If you ignore the lien, they can later seek a recovery not only from the injury victim, but also the lawyer. Unlike many liens, notice is not required, so lawyers need to find out if there is a Medicare lien, as opposed to sitting back passively waiting for a lien notice. Under the statute, if the lien exceeds the amount of the recovery, Medicare recovers the entire lien, excluding only the lawyer fees and expenses.

 So is there any hope beyond recovery of the attorneys’ fees? There is. Medicare has authority to reduce or waive its Medicare lien if it is in the “best interests of the program,” if the “probability of recovery, or the amount [of the recovery] not warrant pursuit” of the lien, or if enforcing the lien would lead to significant “financial hardship.” This means you have to find the right person to talk to at Medicare and you need to make a real case; you can’t just have a paralegal call and ask for a reduction. You also need patience, because getting a response takes time and multiple phone calls and letters.

Not surprisingly, the more of a reduction you seek, the more hoops you have to jump through. If the request exceeds $ 100,000.00, the Department of Justice decides whether a reduction is in order.  Obviously, this adds more time, more phone calls and more letters to the process.

There is nothing more frustrating than killing yourself to settle an auto accident or medical malpractice case, only to realize you work has just begun. But in many cases, it is the most essential work a lawyer can do on the case in terms of achieving some measure of justice for your injured client.